The Senate is scheduled to vote on the long-awaited Cryptocurrency Market Structure Act on Tuesday, but it remains unclear whether the bill, known as the Transparency Act, will garner enough votes to pass amid intensifying last-minute lobbying by banks and the crypto industry.
The Clarity Act, which would establish a new regulatory structure for cryptocurrencies and other digital assets, has been stalled in the Senate for months. The bill passed the Senate Banking Committee in May but has stalled as Senate leaders struggle to get the 60 votes needed for floor approval. If everyone is present, at least seven Democrats would need to support the bill to avoid a filibuster.
A myriad of issues could delay the process and jeopardize the vote. Banks have warned that they cannot support the bill unless it includes an amendment to suspend payments such as interest on stablecoins, which they say could lead to deposit flight. And the only two Democrats who voted to advance the bill outside of committee said they could not support it unless it included stronger ethical language to prevent officials like President Donald Trump and his family from profiting from crypto ventures.
Tuesday’s primary vote is a make-or-break moment for the cryptocurrency bill, which Senate Majority Leader John Thune, R.S.D., scheduled just before senators depart for the August recess. Supporters hope they can muster enough support to keep the bill alive.
“Over the past year, this bipartisan process has given everyone at the table a real chance to shape the Transparency Act. This bill truly reflects the priorities of both sides,” Sen. Cynthia Lummis (R-Wyo.), one of the bill’s leaders, said after releasing the updated document Thursday to drum up support. “This is a good bill, and it’s time for it to become law.”
Many Democrats oppose the bill, primarily because it lacks ethical language that they say needs to address President Trump and his family’s profiteering from crypto ventures.
Sen. Chris Van Hollen (D-Md.) said on Sunday’s X show, “I can tell you that I haven’t heard from voters that their number one concern is passing transparency legislation,” adding, “This is a bill that pretends to be a way to create good regulation and consumer protections around cryptocurrencies, but there are some big problems that it doesn’t fix.”
“You can’t afford to miss this,” Van Hollen said in the post.
Still, the Clarity Act appears to be a jump ball at this point.
Republican leaders behind the bill released an update on the bill late Sunday, saying it reflects a final proposal to meet Democratic demands for the bill. The updated bill includes provisions that Republicans say represent the bulk of the Cryptocurrency Ethics Agreement that President Trump has now agreed to, brokered by Sens. Thom Tillis (RN.C.) and Ruben Gallego (D-Ariz.). That includes a key Democratic request to allow state attorneys general to enforce ethics requirements on federal employees.
The bill also includes a compromise on stablecoin yields aimed at placating bank interests by instructing the Secretary of the Treasury to limit rewards in the event of large-scale deposit flight from community banks.
A Democratic aide familiar with the negotiations said it’s possible that enough Democrats will support keeping the bill alive when the time comes for a primary vote. The aide, speaking on condition of anonymity to discuss private negotiations, said Thune had suggested the vote be a “free vote.” This means that the vote is simply to keep the bill moving forward, and the bill can be amended and voted on again before final passage to address any persistent concerns.
Sen. Bernie Moreno (R-Ohio), one of the sponsors of a bill that received funding from crypto interests during his 2024 campaign to oust former Sen. Sherrod Brown (D-Ohio), sought to remind senators on Sunday that Tuesday was not the final vote.
“This is not a vote on final passage. This is a vote to end the debate on whether the U.S. Senate should consider legislation regulating digital assets,” Moreno said in the X post. “If senators have concerns about this bill, they can submit amendments after we agree to take up the bill.”
The White House has also hinted at further concessions on ethics language and other issues, but only if the Senate clears a primary vote, Democratic aides said. This promise could serve as an additional sweetener to entice Democratic lawmakers interested in cryptocurrencies to vote to advance the bill to see what the White House proposes.
“The President is clear: Congress needs to pass the Clarity Act so that we can stay ahead of our foreign competitors and lead the world in innovation,” the White House Press Office said in an emailed statement, but did not respond to CNBC’s questions about concessions on the ethics language of the Clarity Act. “The Trump administration has worked vigorously with Congress on the CLARITY Act and has already agreed to the most comprehensive and far-reaching ethics provisions in history.”
Cryptocurrency insiders are bullish about the bill’s prospects. coinbase The company’s CEO, Brian Armstrong, has been vocal about his support for the bill, saying on CNBC Thursday that the bill is ready for support in the Senate.
Armstrong also said that regardless of the outcome of the vote, there will be regulation of cryptocurrencies.
“Frankly, even if it doesn’t pass, that would be a good outcome, because the SEC and the CFTC have said they’re willing to issue a proposed rulemaking and we’re going to get some form of regulatory clarity on the 15th or the next day or the day after,” he said, referring to the Securities and Exchange Commission and the Commodity Futures Trading Commission.
Coinbase also last week struck a deal with financial services provider Moov to give community banks access to stablecoin functionality, a move likely aimed at alleviating community banks’ fears about being treated like a big shot by the Clarity Act. CNBC first reported the agreement.
Banks, including the community banking trade group Independent Community Bankers of America, are leading the charge against transparency laws, including the latest version, citing concerns about stablecoin yields.
Technically, the bill could be brought back in a modified form if Tuesday’s primary vote fails, but if Tuesday’s vote fails, it’s unclear whether lawmakers will have enough time to amend the bill and get it across the finish line before the end of this session.
And the current opposition to the bill is unlikely to go away.
In a letter Thursday to Mr. Thune and Senate Minority Leader Chuck Schumer of New York, the American Bankers Association joined about 80 other banking groups in urging the Senate to strengthen the bill’s stablecoin provisions. Some Senate Republicans have also expressed misgivings about the transparency law, citing bankers’ concerns.
The bill’s “prohibition on stablecoin payments of interest, yield, and fees must be strengthened to protect community financial institution deposits and community lending to small businesses, farmers, and families,” the groups said.
The updated bill language does not appear to resolve all of the bankers’ issues with this bill.
“Bankers from across the country had the opportunity to speak with their senators about the importance of preserving the deposits that support local lending,” Brooke Ybarra, ABA’s senior vice president of innovation and strategy, said in a statement to CNBC.
Ybarra also said he was optimistic that senators would oppose the bill on the floor.
“We appreciate the growing number of members of Congress who share our concerns about the current concession loopholes in the bill, and recognize that targeted changes in the Clarification Act can strengthen the bill and improve its chances of passage in the Senate,” Ybarra said. “We are optimistic that the Senate will ultimately consider improved transparency legislation that embraces innovation without hurting the economy.”
